Yahoo Finance The Hartford Financial Services Group Inc (HIG) Q1 2024 Earnings Call Transcript Highlights: ...
Core Earnings: $709 million
Earnings Per Share (EPS): $2.34 per diluted share
Trailing 12-Month Core Earnings ROE: 16.6%
Commercial Lines Core Earnings: $546 million
Commercial Lines Underlying Combined Ratio: 88.4%
Small Commercial Written Premium Growth: 8%
Small Commercial Underlying Combined Ratio: 89.6
Middle & Large Commercial Written Premium Growth: 9%
Middle & Large Commercial Underlying Combined Ratio: 89.2
Global Specialty Underlying Combined Ratio: 85.3
Global Specialty Written Premium Growth: 8%
Personal Lines Core Earnings: $33 million
Personal Lines Underlying Combined Ratio: 96.1
Personal Lines Written Premium Increase: 13%
Auto Written Pricing Increases: 25.7%
Homeowners Written Pricing Increases: 15.2%
Group Benefits Core Earnings: $107 million
Group Benefits Core Earnings Margin: 6.1%
Fully Insured Ongoing Premium Growth: 2%
Net Investment Income: $593 million
Total Annualized Portfolio Yield: 4.3% before tax
Share Repurchases: 3.8 million shares for $350 million
Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Chris, I noticed in your opening remarks, you talked about some pressure on group life sales. Is that something that you foresee going forward? A: Christopher Jerome Swift - The Hartford Financial Services Group, Inc. - Chairman & CEO: Yes, we did call out a little lighter sales volume during the quarter. We've been fairly disciplined in our thinking about where mortality is trending, particularly post-pandemic. We believe we're still operating in an endemic state of mortality, which means it's going to be higher than normal, which we think will continue for at least the next couple of years. We've been pricing our product with that view, which obviously has an impact then on sales if market participants don't have a similar view.
Q: There's been a ton of talk now about long-tail reserving. Any concerns? A: Christopher Jerome Swift - The Hartford Financial Services Group, Inc. - Chairman & CEO: We have a high degree of confidence in our current loss picks. We've been hard at work improving our underwriting, reunderwriting different classes of business, changing terms and conditions. We're also humble enough to admit we didn't get everything right over the last 5 years. When we feel that adjustments are made, we're pretty clear and transparent about why we're making those adjustments.
: On the Personal Lines side, what are you seeing from a frequency and severity perspective right now? A: Christopher Jerome Swift - The Hartford Financial Services Group, Inc. - Chairman & CEO: We're beginning to see moderation both in our auto loss cost trends on a BI and a PD basis. Overall trends for '23 were in the mid-double digits, and I expect that to come down into the low double-digit range here in '24. We are rate adequate in 80% of our states.
Q: How do you see pricing across Commercial Lines playing out as we move through this year? A: Christopher Jerome Swift - The Hartford Financial Services Group, Inc. - Chairman & CEO: We're really pleased with the stability in the marketplace and still very optimistic as we play out 2024. Ex-comp. Our written renewal rate increased, increased to 70 basis points, I thought it was healthy. That does include an element of exposure to that excess rate, which we call out in the general 2.3 points range or 25% exposure, 75% rate base.
Q: Can you help reconcile how you grow your property business and not change your cat profile? A: Christopher Jerome Swift - The Hartford Financial Services Group, Inc. - Chairman & CEO: Cat profile versus risk appetite, I'd see a little difference. We're not increasing our property cat appetite per se. We've always said that we're willing to write property if it comes with some incremental small elements of cat, in which I think we've been managing perfectly.
Q: What is the experience of retaining clients given that you are a direct carrier and you only can present them with Hartford product? A: Christopher Jerome Swift - The Hartford Financial Services Group, Inc. - Chairman & CEO: That's the trade-off we're making right now, lower retention for a more profitable cohort to get us back to that targeted profitability. I don't think it's outside of the range of expectations that we've had as far as that trade-off.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
